Toward a 21st-century health care system: recommendations for health care reform.

The coverage, cost, and quality problems of the U.S. health care system are evident. Sustainable health care reform must go beyond financing expanded access to care to substantially changing the organization and delivery of care. The FRESH-Thinking Project (www.fresh-thinking.org) held a series of workshops during which physicians, health policy experts, health insurance executives, business leaders, hospital administrators, economists, and others who represent diverse perspectives came together. This group agreed that the following 8 recommendations are fundamental to successful reform: 1. Replace the current fee-for-service payment system with a payment system that encourages and rewards innovation in the efficient delivery of quality care. The new payment system should invest in the development of outcome measures to guide payment. 2. Establish a securely funded, independent agency to sponsor and evaluate research on the comparative effectiveness of drugs, devices, and other medical interventions. 3. Simplify and rationalize federal and state laws and regulations to facilitate organizational innovation, support care coordination, and streamline financial and administrative functions. 4. Develop a health information technology infrastructure with national standards of interoperability to promote data exchange. 5. Create a national health database with the participation of all payers, delivery systems, and others who own health care data. Agree on methods to make de-identified information from this database on clinical interventions, patient outcomes, and costs available to researchers. 6. Identify revenue sources, including a cap on the tax exclusion of employer-based health insurance, to subsidize health care coverage with the goal of insuring all Americans. 7. Create state or regional insurance exchanges to pool risk, so that Americans without access to employer-based or other group insurance could obtain a standard benefits package through these exchanges. Employers should also be allowed to participate in these exchanges for their employees' coverage. 8. Create a health coverage board with broad stakeholder representation to determine and periodically update the affordable standard benefit package available through state or regional insurance exchanges.

Financial anatomy of biomedical research.

CONTEXT: Public and private financial support of biomedical research have increased over the past decade. Few comprehensive analyses of the sources and uses of funds are available. This results in inadequate information on which to base investment decisions because not all sources allow equal latitude to explore hypotheses having scientific or clinical importance and creates a barrier to judging the value of research to society. OBJECTIVE: To quantify funding trends from 1994 to 2004 of basic, translational, and clinical biomedical research by principal sponsors based in the United States. DESIGN: Publicly available data were compiled for the federal, state, and local governments; foundations; charities; universities; and industry. Proprietary (by subscription but openly available) databases were used to supplement public sources. MAIN OUTCOME MEASURES: Total actual research spending, growth rates, and type of research with inflation adjustment. RESULTS: Biomedical research funding increased from 37.1 billion dollars in 1994 to 94.3 billion dollars in 2003 and doubled when adjusted for inflation. Principal research sponsors in 2003 were industry (57%) and the National Institutes of Health (28%). Relative proportions from all public and private sources did not change. Industry sponsorship of clinical trials increased from 4.0 dollars to 14.2 billion dollars (in real terms) while federal proportions devoted to basic and applied research were unchanged. The United States spent an estimated 5.6% of its total health expenditures on biomedical research, more than any other country, but less than 0.1% for health services research. From an economic perspective, biotechnology and medical device companies were most productive, as measured by new diagnostic and therapeutic devices per dollar of research and development cost. Productivity declined for new pharmaceuticals. CONCLUSIONS: Enhancing research productivity and evaluation of benefit are pressing challenges, requiring (1) more effective translation of basic scientific knowledge to clinical application; (2) critical appraisal of rapidly moving scientific areas to guide investment where clinical need is greatest, not only where commercial opportunity is currently perceived; and (3) more specific information about sources and uses of research funds than is generally available to allow informed investment decisions. Responsibility falls on industry, government, and foundations to bring these changes about with a longer-term view of research value.

Why have academic medical centers survived?

Over the past decade, many observers predicted the demise of the academic medical center (AMC) due to competition from community hospitals and physicians, fragile finances, inefficiency, and organizational complexity. In 2004, we interviewed 23 AMC and community hospital administrators to determine why those predictions have proven unfounded, learn the leaders' current concerns and priorities, and to identify desirable changes. Chief concerns were reimbursement uncertainty, federal research policy, ineffective internal decision-making, and clinical quality (mentioned in more than 75% of interviews). Priorities included ensuring sufficient investment capital, revising undergraduate and graduate curricula, strengthening ties with physicians and community hospitals, attracting faculty, and meeting regulatory requirements. We advocate that the AMC: (1) modify the research model to allow greater collaboration with institutions and researchers; (2) enhance free and open export of new and proven clinical techniques and knowledge; (3) devote greater attention to meeting patients' increasing needs for counsel and guidance, not just intervention, given the plethora of complex new technologies and their promotion in the popular media; and (4) simplify their organizations. To accomplish this, it is desirable for future leaders to gain experience outside the AMC, and for faculty and institutions to be less inwardly focused and more attentive to preserving the public's trust.

Partners HealthCare: an exercise in marital counseling.

The high cost of health care in Boston led industry and government to expand managed care. The expensive academic health centers had the choice of closing, downsizing, merging, and/or integrating. The MGH and BWH chose to develop Partners HealthCare (PHCS) an integrated healthcare system that maintained the identities of the founding institutions. PHS founded in 1994 is physician-led and protects the missions of patient care, research and education. It includes the MGH and BWH, four community hospitals and one thousand primary care physicians. All administrative services have been consolidated as had several clinical departments, residencies and fellowships. Research coordination has resulted in shared space, grants, industrial partnerships, and a growth in support. Clinical service volumes have surpassed pre-merger levels. Contracts now cover the true costs of care and produce positive operating margins and bottom lines. The strategy of forming an integrated health system has achieved most but not all of its goals.